Caterpillar to Explore Strategic Alternatives for Certain Mining Products

Caterpillar announced Aug. 22 that it is making changes to its product line-up, including that it will discontinue production of track drills and is reviewing its room and pillar product lines, which serve a segment of underground soft rock mining customers.

Caterpillar and Stowers Machinery Corporation remain committed to existing customers and will support those room and pillar and track drill fleets currently in operation.

“These moves, which align with Caterpillar’s ongoing restructuring, will allow us to focus resources on those areas of the business that provide the highest, sustainable growth and best long-term returns,” said Denise Johnson, group president with responsibility for Resource Industries.


Room and Pillar and Track Drills

The room and pillar underground mining products under strategic review for possible divestiture include continuous miners, feeder breakers, coal haulage systems, highwall miners, roof bolters, utility vehicles and diesel vehicles. While under review, Caterpillar will stop taking new orders. Stowers will continue to provide parts and service for this equipment while it is under review.

Production of track drills will be discontinued, and no new orders will be taken.

“Caterpillar remains committed to an extensive mining product portfolio. We firmly believe mining is an attractive long-term industry, and we continue to invest in a broad range of products, both surface and underground. We are targeting our investments within the mining product portfolio to concentrate on those areas with the highest profitability potential,” said Johnson.

 

Workforce Impact

In conjunction with the announcement, Caterpillar expects to take actions to reduce the workforce in Houston, Pennsylvania, where the room and pillar products are manufactured. While the company intends to sell the room and pillar products, it will also assess other options, including a possible closure of the Houston facility.

Total workforce reductions of up to 155 positions associated with the room and pillar business are expected, with some occurring immediately. These actions will more closely align employment levels with current end-market demand.

In Denison, Texas, where track drills are produced, approximately 40 positions will be eliminated as a result of the track drill exit and other facility restructuring.

 

Repurposing of Winston-Salem Facility

In addition to these moves, the company also continues to evaluate the most efficient and effective use of its manufacturing footprint. The company announced today it will repurpose its Winston-Salem, North Carolina, facility, transitioning it from a mining to a rail facility beginning later this year. Operations will transfer to Progress Rail, a wholly owned Caterpillar subsidiary.

As a result, the company will relocate the manufacturing of some components used in large mining trucks from its facility in Winston-Salem to its existing facility in Decatur, Illinois.

To learn more about how these changes could impact your organization, please contact a Stowers sales representative.